Online Banking

If the ATMs were a revolution in Banking, the internet banking and mobile banking facilities have taken the entire banking experience to a new level. Gone are the days of long queues at bank counters. You need not worry about their lunch times and closing hours. It means convenience to the bank as well as it saves man hours and helps reduce congestion at the branch.

Online services started in New York in 1981 when four of the city’s major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services using the videotex system. Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidised by the telecom provider and the UK, where the Prestel system was used.
Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in Oct, 1994.
In India Internet Banking started in late 90s. In 1997, ICICI (Industrial Credit and Investment Corporation of India) bank was the first bank in India to offer Internet banking with Finacle’s (infosys) e-banking solution and established itself as a leader in the Internet and eCommerce space.

Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific.
Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer... and applications... apply for a loan, new account.
Non-transactional (e.g., online statements, check links, cobrowsing, chat)

Features commonly unique to Internet banking include
Personal financial management support, such as importing data into personal accounting software. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.
The banking industry in India is facing unprecedented competition from non-traditional banking institutions, which now offer banking and financial services over the Internet. The deregulation of the banking industry coupled with the emergence of new technologies, are enabling new competitors to enter the financial services market quickly and efficiently. Indian banks are going for the retail banking in a big way. However, much is still to be achieved.
• Throughout the country, the Internet Banking is in the nascent stage of development (only 50 banks are offering varied kind of Internet banking services).
• In general, these Internet sites offer only the most basic services. 55% are so called 'entry level' sites, offering little more than company information and basic marketing materials. Only 8% offer 'advanced transactions' such as online funds transfer, transactions & cash management services.
• Foreign & Private banks are much advanced in terms of the number of sites & their level of development.
The Internet banking is changing the banking industry and is having the major effects on banking relationships.
Internet banking involves use of Internet for delivery of banking products & services. It falls into four main categories, from Level 1 - minimum functionality sites that offer only access to deposit account data - to Level 4 sites - highly sophisticated offerings enabling integrated sales of additional products and access to other financial services- such as investment and insurance. In other words a successful Internet banking solution offers
• Exceptional rates on Savings, CDs, and IRAs
• Checking with no monthly fee, free bill payment and rebates on ATM surcharge
• Credit cards with low rates
• Easy online applications for all accounts, including personal loans and mortgages
• 24 hour account access
• Quality customer service with personal attention
Advantages previously held by large financial institutions have shrunk considerably. The Internet has leveled the playing field and afforded open access to customers in the global marketplace. Internet banking is a cost-effective delivery channel for financial institutions. Consumers are embracing the many benefits of Internet banking. Access to one's accounts at anytime and from any location via the World Wide Web is a convenience unknown a short time ago. The six primary drivers of Internet banking includes, in order of primacy are:
• Improve customer access
• Facilitate the offering of more services
• Increase customer loyalty
• Attract new customers
• Provide services offered by competitors
• Reduce customer attrition